Ofgem will announce on Friday £300m of European funding for investment in
power lines from offshore wind farms, as the regulator tries to encourage
the "forgotten infrastructure" behind Britain's green revolution.

Windfall: the European Investment Bank is to contribute to the development of power lines from offshore wind farms in the UK like the one pictured in North Hoyle off North WalesPhoto: Reuters

By Rowena Mason

7:37PM GMT 29 Oct 2009

Lord Mogg, the chairman of the regulator, said he hoped money for six projects, which will come from the European Investment Bank, would encourage investors who are not currently involved in electricity transmission.

"The energy industry has been dogged in many European countries by the dominance of incumbent players," Lord Mogg said. "Renewables could change that with the chance for different players to enter the market."

Ofgem has been trying to reduce costs associated with offshore connections by £1bn, insisting that nine new power lines from wind farms to the grid are auctioned off to different operators. It hopes this will foster greater competition over costs, which will be passed on to consumers.

Thirteen companies, from RWE npower and Balfour Beatty to funds connected to Macquarie Bank and ABN Amro have been shortlisted as bidders for links worth £1.15bn, but new funding would speed up the process.

More than £15bn will be needed to connect 33 gigawatts of wind power to the mainland, if Britain manages to build all the turbines to meet its climate change targets. This is on top of the £60bn to £70bn that will be needed to construct the wind farms themselves.